Stressing that the economic slowdown being felt currently is not specific to India, Finance Minister (FM) Nirmala Sitharaman has made several announcements to spur an increase in the growth rate.
Among the announcements, the FM has said that the surcharge on the Foreign Portfolio Investors (FPIs) and domestic investors will be revoked. The step will boost the investment in markets, particularly from foreign investors.
“It has been decided that enchanced surcharge levied on long term and short term capital gains on equities goes”, the FM said.
In the 2019-20 Budget, the government had increased surcharge from 15 per cent to 25 per cent on taxable income between Rs 2 crore and Rs 5 crore, and from 15 per cent to 37 per cent for income above Rs 5 crore. It was also applicable for FPIs operating as trusts or as association of persons.
FPIs expressed concern over proposal of higher tax but the Finance Minister had then refused to give any relief to FPIs.
Post-Budget, equity markets plunged, with FPIs turning into net sellers and withdrawing Rs 12,419 crore from the market. The FPIs have been demanding a review of the move. Sitharaman then held consultations earlier this month with stakeholders to hear their grievances.”